Change Management and Organizational Development

Posted on Mar 5, 2025 in Financial and Accounting Management

Change

Framework Conditions:

• Jumps in innovation cycles
• Shortening of resource time and money
• Key driver of change: the market

Managing Complexity:

• Operations: Reduced processing time, costs, manual work, and errors
• Customers: Faster, standardized customer service
• Information Technology: Lower development costs and fewer non-standard requirements
• Finance: Better understanding of probability and more predictability
• Marketing & Product Development: Faster time-to-market and lower costs
• Sales: Increased sales, repricing opportunities, and transparency

4 C’s Global Leadership Model: Conflict, Connectivity, Creativity, Communication

Change Management: A systematic approach to deal with change from the perspective of a company and individual. The process, tools, and techniques to manage the people-side of change. Processes that empower employees to embrace change by using different tools and techniques. Moving from the current state to a future state while minimizing disruption to the organization and maximizing benefits.

From current state to transition state to future state on the people side as well as on the technical side (through project management and change management)

• Communication: Assess and select delivery channels, plan and deliver messages
• Training/Support: Assess skills and training needs, deliver training plan, recruit trainers
• Engagement: Stakeholder involvement, gather feedback, participate in project roles, focus groups
• Sponsorship/Leadership: Identify and assess leaders, educate and coach sponsors
• Impacts/Readiness: Identify audience, document impacts, identify change enablers and inhibitors
• Monitor/Reinforce: Reinforce behaviors, measure and monitor adoption, intervene as required

Organizational Development: “The Big Picture”

• Stakeholder Value Management: HR, marketing, sales, customer service, PR, IR, regulatory affairs
• Profit Management: Accounting, taxation, finance
• Operations Management: Resource management, product/service production, logistics

Barriers:

• Psychological Issues: Cold start, fear, why change
• Lack of Employee Involvement: Most common, fear of the unknown, listening to their opinions, providing relevant, sufficient resources
• Lack of Effective Communication Strategy: Stick to the truth, constant interaction, employees need to know how the change will affect them as well as how they will adapt to the change, not just what to do.
• Bad Culture Shift Planning: Taking employees’ feelings into account
• Unknown Current State: Conducting an assessment to understand the current state of change
• Organizational Complexity: Introducing a keen and skillful approach, never tackle a change that is too complex for your organization

Signs of Resistance: Confusion, denial, sabotage, easy agreement, silence, criticism

Success Factors:

• Active & Visible Executive Sponsorship: Leading and motivating others, making effective decisions, having the ability to align priorities among other leaders, direct communication with project management teams, and being accessible
• Structured Change Management Approach: Formal approach, process: established, customizable, scalable, easy to implement across multiple changes, easy to apply at every phase of the project; Assess, design, implement, manage change, evaluate
• Dedicated Change Management Resources: Someone has to be responsible and has to have access to an appropriate amount of funding and resources, dedicated resources with change management experience, and a change team of flexible, ambitious, decisive, collaborative individuals
• Integration & Engagement with Project Management: Supporting collaboration between project and change management for the overall plan, integrating CM & PM approaches
• Employee Engagement & Participation: Making employees aware of the need for change, conducting training, involving employees in project design, hosting special events to promote change. Aim: employee base with a willingness to participate in the change process, doing things differently
• Frequent & Open Communication: Delivering change messages in a timely and transparent manner, using effective channels and frequent communication, communicating clear and compelling reasons for the change, implications of not changing, CEO is the preferred sender
• Engagement of Middle Managers: Closest to employees impacted by change (frontline), most resisting, frequent meetings and one-on-one (for continued support), training and coaching

Lewin’s Change Model:

• Unfreeze: Determine needs to change, ensure strong support, create the need for change, manage and understand doubts and concerns
• Change: Frequent communication, dispel rumors, empower action, involve people in the process
• Refreeze: Anchor the changes into the culture, develop ways to sustain the change, provide support and training, celebrate success

The new manager: old skills less relevant, management of permanent change, safeguarding the future

Leadership vs. Management:

• Leadership:
  • Establishes Direction: Creates vision, clarifies the big picture, sets strategies
  • Aligns People: Communicates goals, seeks commitment, builds teams, coalitions
  • Motivates/Inspires: Empowers subordinates, satisfies unmet needs
• Management:
  • Planning/Budgeting: Establishes agendas, sets timetables, allocates resources
  • Organizing/Staffing: Provides structure, makes job placements, establishes rules/procedures
  • Controlling/Problem Solving: Develops incentives, generates creative solutions, takes corrective action

The 3 Obstacles: Be proud of old experiences, conservative order thinking, modesty, and adaptability

Transactional vs. Transformational

• Transactional: Relies on standard forms of inducement, reward, punishment, and sanction to control staff, the award of effort and reward, depends on the leader’s power to reinforce subordinates, short-term and hard data-oriented
• Transformational: Motivates staff to exceed expectations and go beyond self-interest by emotionalizing them, proactive and provides opportunities, inspires and provides individualized consideration, intellectual stimulation, and idealized influence, creates learning opportunities, possesses good visioning and skills to develop emotional bonds with staff

5 Components of Emotional Intelligence at Work:

Self-awareness, self-regulation, motivation, empathy, social skill cohesion. Differentiation (higher price) competitive advantage.

Management Definition: Formulating corporate policy and organizing, planning, controlling, and directing the firm’s resources to increase effectiveness

Effective: achieve goals // Efficient: achieve goals with minimum waste of resources

Management Functions: Planning, decide goals, allocate resources to achieve them. Organizing, establish rules and reporting relationships. Leading, encourage and coordinate employees. Controlling, evaluation to maintain and improve performance.

Stakeholders: Creditors, customers, suppliers, directors, employees, government, shareholders

Humanity evolves in stages by sudden transformation, including organizational breakthroughs

Human Development/ Organizational Paradigms: Foraging bands, authority by elders, powerful chiefdoms, formal hierarchies command & control, effective matrix (predict & control, shareholder perspective), relationships above outcome (stakeholder perspective), self-management for evolutionary purpose

• Red Organizations (Impulsive): Constant exercise of power by the chief, fear is the glue, highly reactive, short-term focus, thrive in chaotic environments. Leadership style: Predatory. Key Breakthrough: Division of labor, command authority.
• Amber Organizations (Conformist): Highly formal, top-down command/control, stability is the main aim, future is a repetition of the past. Leadership style: Paternalistic-authoritative. Key Breakthrough: Formal roles, formal processes.
• Orange Organizations (Achiever): Aim = beat competition, achieve profit/growth, innovation is key to staying ahead, command “what” freedom “how”. Leadership style: Goal/task-oriented, decisive. Key Breakthrough: Innovation, accountability, meritocracy.
• Green Organizations (Pluralistic): Within the classic pyramid structure, focus on culture and empowerment to achieve employee motivation. Leadership style: Consensus-oriented, participative, service. Key Breakthrough: Empowerment, values-driven culture, stakeholder model.
• Teal Organizations (Evolutionary): Self-management replaces the hierarchical pyramid, organization = living entity with evolutionary purpose and creates potential. Leadership style: Distributed leadership, with inner purpose as the primary motivator. Key Breakthrough: Self-management, wholeness, evolutionary purpose.

The level of consciousness of an organization cannot exceed the consciousness of its leader

Teal Breakthroughs: Self-management, operate effectively, based on peer relationships

Teal Self-Management Practices: Self-organizing teams, almost no staff functions, coordination ad hoc when arising, radically simplified project management, minimum plans/budgets, fluid and granular roles, transparent/real-time information sharing, everyone has full responsibility for the organization, focus on team performance, salaries with peer calibration, no bonus, profit-sharing

Teal Wholeness Practices: Personalized spaces without status markers, clear values translated into explicit rules, ongoing discussion, absence of job titles, distributed initiatives thinking, personal freedom on training, focus on cultural building

Teal Evolutionary Purpose Practices: Organization as a living entity with its own evolutionary purpose, strategy emerges organically from collective intelligence, competition irrelevant, simplified/no budgets, change management not relevant because of constant adaptation, profit is not an important indicator, growth/market share only important to achieve purpose

Why Teal Organizations Are Successful: Through purpose, distribution of power, learning, use of talent, evolutionary purpose & better/more/timely decision-making; Less energy wasted in propping up ego, compliance, meetings

Exponential Organization: Impact/output is disproportionately larger compared to its peers because of the use of new organizational techniques that leverage exponential technologies. Attributes: Staff on demand, community/crowd, algorithms, leveraged assets, engagement/// interfaces, dashboards, experimentation, autonomy, social (left side of the brain)

Linear vs Exponential:

• Linear: Strategy based on extrapolation from the past (5-year plans), process inflexibility & risk intolerance, innovation from outside
• Exponential: Strategy based on pivots & 1-year operational plan, flexibility & smart failure celebration, innovation at the edges & outside sources

Agile Project Management: Satisfy the customer, stakeholders, and customers review progress and reevaluate priorities to ensure alignment with customer needs and company goals, flowing product development with iterations going back and starting a new iteration

Key Principles: Focus on customer value, small batches, small/integrated teams (self-organization), small/continuous improvements (iterative delivery), efficient processes with lower costs and higher productivity (experimentation and adaptation for continuous improvement)

Advantages: For developing critical breakthrough technology or essential features, continuous integration, verification, and validation of the evolving product, frequent demonstration of progress, early detection of defects and problems.